n the morning after the budget I awoke in a small ward in Whipps Cross Hospital, an undistinguished general hospital serving the whole of north-east London. I took one look at the headline in The Independent, read about a paragraph and had to put it down; I couldn't bear to read any more.

What The Independent picked up on, to its credit, that none of the other papers gave anything like the same prominence (so busy were they lauding the money that is coming to the health service at least five years too late) was that the government's "reforms" in return for which the chancellor was prepared to bestow such largesse was to make patient choice the keystone of the NHS. Patients are to be allowed to go to whatever consultant or hospital they wish.

To illustrate just how infantile and ill thought through that principle is, consider my own situation that week. That Sunday I had to be taken, much to my embarrassment, to my local A & E department (nobody there calls it Casualty) and had ended up spending a pleasant few days on a drip while my insides untied themselves from the knot into which they had managed to get themselves.

It had been clear from the start that the problem would right itself, but if it had not I would have had to make a decision whether I stayed put at Whipps, and with the surgeon I had met on Monday morning, or whether to ask to be transferred to the Middlesex, my more usual haunt.

I have a degree in medicine and 25 years experience managing four (or five depending how you count them) complex and specialist conditions. If any patient was qualified to make that kind of decision, it was I. But I came to the conclusion that I was in absolutely no position to make an informed decision.

A nursing friend pointed out that someone might have had a bad experience with a particular hospital or consultant and want to go somewhere else. That is something a decent GP could sort out, if GPs weren't so overworked and underfunded. We would do better making sure primary care is funded at a level that allows GPs to do their job properly (and not have to cope with problems that are more social than medical).

The signs had been there for some time: foundation hospitals had been floated some time previously. NHS Lift is a PPP bringing in private money to rebuild GP practices which is supposed to be "the only way forward to get the levels of capital investment we need" (Guardian Society 27.2.02) in which GPs can "take or earn an equity stake in the company".

Charles Webster, an historian of the NHS, in a recent book pointed out that government policy has amounted to more privatization than even the Tories dared. The NHS Alliance has been critical of league tables, suggesting that meeting local need should be the criterion of success.

But on budget day there it was: all the paraphernalia of opting out, foundation hospitals, allowing those that succeed to prosper and failing hospitals to close. The Guardian did pick up the following day on the fact that most of it was little different from the Tories failed internal market, but the government essentially got away with it. All we heard about was the £61 billion and not the fundamental erosion of a national service. Even Frank Dobson, not exactly the most obvious new Labour opponent, has worked out that this will bring in a two tier health service, just as the same deification of choice has brought in a three or four tier education service.

It is not simply that neither patients, nor necessarily GPs, have the information to make clinically informed decisions, but that they will, being human beings, tend to make their decisions on quite spurious grounds. I read that depressing abandonment of a unified health service in a fairly run down, run-of-the-mill local general hospital serving a not particularly affluent part of East London. I was struck forcibly by the difference between the social background of patients here, and, say, the National Hospital, or Great Ormond Street. Whipps does not have particularly high scoring health outcomes, it has just dropped from two stars to one on the Department of Health's ratings. It is not very high status: it isn't the sort of place whose inclusion in your CV confers an automatic caché. But there is twenty years of hard research evidence that says the primary factor in health outcomes is one's place on the income ladder. Whipps has poorer health outcomes because its patients are poorer.

But the result of this lack of status, and an undeservedly lowly image, is that "the better class of person" tends to go elsewhere, to St. Margaret's Epping, to Harlow, and, of course, privately. So, when people are given a choice as to where they should go, how many will accept a referral to their run down, slightly grotty, local hospital, or want to have 'the best'? And of course, as even Frank Dobson has now worked out, if the patients follow the 'successful' hospitals, they will become more successful: they will attract the best qualified staff, they will get to do the high status work, and a spiral of decline will set in for the less fortunate institutions.

As for strategic planning it is ludicrous. This is a system absolutely guaranteed to generate perverse outcomes that will make the postcode lottery look sane by comparison. You cannot have a system organized on the larger scale if the bulk of the decisions are made by a series of independent units.

The same problem will occur with Primary Care Trusts (PCTs) if all strategic organization is left to them: indeed it is already happening. Last year I spoke to the chairman of a PCT who said that if PFI got him the money his patients needed, then PFI it was. The problem is that each individual trust taking that view has resulted in a situation in which PFI has become established and entrenched, a situation virtually nobody wanted. Indeed one could be forgiven for suggesting that the breakup of the system into autonomous units is actually designed to achieve this outcome: none of the decision making units will be large enough to stand up to central government policy.

And it will be a lot harder to fight the inclusion of private providers if individual patients are making rational individual decisions for themselves, some of which decisions will include using private facilities: once enough people are using the private providers it will be a lot harder to argue and organize against their exclusion from health services.

Too many people will already have said an effective yes. Smaller decision making units will also find it harder to stand up to the (GATS allowed) corporations that are eyeing our health services as a potential market. The neo-liberals must be regarding the chancellors efforts with approval.

There is, however, some hope that it won't quite work out as the government wishes and which can show us a way to work: an awful lot of people have a deep-rooted loyalty to the institution that looked after them when they were ill. For every critical letter in my local newspaper there are two or three supporting the diligence and damn hard work of Whipps staff.

Patients may also subvert the government's intentions for another reason: the one thing that patients really want, and the one thing that is most emphatically not on the menu for them, is a local hospital. They would prefer a small, friendly, local hospital where they stand a chance of getting to know the staff and having a relationship over their lives with the people who will treat them.

And that is one thing the government has absolutely no intention of offering, what with walk-in clinics, NHS direct, and atomized individual choice. They don't want cohesive local communities who will stand up to them, they want individuals who are much more likely to accept outcomes they do not like because, standing alone, they see no alternative.

But second to that, many people will prefer to go to their local hospital, good, bad or something in between, because that's where they've always gone, because they know it already, because other people swear by it, and because that is where people from round here go. From now on, I shall be supporting my local hospital.